WHOLESALE PRESCRIPTION DRUG DISTRIBUTORS LICENSE ACT

WHOLESALE PRESCRIPTION DRUG DISTRIBUTORS LICENSE ACT

ACT NO. 1992-145

H.B. NO. 2602

AN ACT Providing minimum standards, terms and conditions for the licensing of persons who engage in wholesale distributions in interstate commerce of prescription drugs; and making a repeal.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

TABLE OF CONTENTS

Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16. Section 17.

Short title. Legislative intent. Definitions/ License and renewal requirements. License application. Storage, handling and recordkeeping. Additional requirements. Persons without license and current renewal. Refusal, revocation, suspension or limitation of license. Injunction against unlawful practices. Penalties for unlicensed practice. Disciplinary proceedings. Right to enter and inspect. Rules and regulations. Severability. Repeal. Effective date.

Section 1. Short title1 This act shall be known and may be cited as the Wholesale Prescription

Drug Distributors License Act.

163 P.S. ? 391.1

Section 2. Legislative intent2 (a) Findings. -The General Assembly finds and declares as follows: (1) The economic interests of this Commonwealth and of its wholesale prescription drug industry will be promoted by requiring the licensure of persons who engage in the wholesale distribution of prescription drugs in interstate commerce under the Federal Prescription Drug Marketing Act of 1987 (Public Law 100-293, 102 State. 95).

(2) Pennsylvania consumers of prescription drugs will be better assured of safe and effective prescription drug products if the Commonwealth joins with other jurisdictions to require the licensure of all persons who operate facilities from which they engage in the wholesale distribution of prescription drugs. (b) Intent. -It is the intent of the General Assembly that this act satisfy the requirements of the Federal Prescription Drug Marketing Act of 1987. It is the further intent of the General Assembly to promote the safety and effectiveness of prescription drug products by requiring all persons who operate facilities within this Commonwealth from which they engage in the wholesale distribution of prescription drugs to secure a license and meet minimum quality assurance and operational standards as required by this act.

263 P.S. ? 391.2

Section 3. Definitions3 The following words and phrases when used in this act shall have the

meanings given to them in this section unless the context clearly indicates otherwise:

"Blood." Whole blood collected from a single donor and processed either for transfusion or further manufacturing.

"Blood component." That part of blood separated by physical or mechanical means.

"Common control." The power to direct or cause the direction of the management and policies of a person or an organization, whether by ownership of stock, voting rights, contract or otherwise.

"Department." The Department of Health of the Commonwealth. "Drug sample." A unit of a prescription drug that is not intended to be sold and is intended to promote the sale of the drug. "Intracompany sales." A transaction or transfer between any division, subsidiary, parent or affiliated or related company under the common ownership and control of a corporate entity. "License." A wholesale prescription drug distributor license. "Manufacturer." Any entity engaged in manufacturing, preparing, propagating, compounding, processing, packaging, repackaging or labeling of a prescription drug. "Prescription drug." Any human drug required by Federal law, the act of April 14, 1972 (P.L. 233, No. 64), known as The Controlled Substance, Drug, Device and Cosmetic Act,4 or regulations promulgated under either, to be dispensed only by a prescription, including furnished dosage forms and active ingredients subject to section 503(b) of the Federal Food, Drug, and Cosmetic Act (52 State. 1040, 21 U.S.C. ? 503(b)). "Wholesale distribution of prescription drugs." Distribution in interstate commerce of prescription drugs to persons other than a consumer or patient, and distribution by a manufacturer, who is a licensee under this act, of prepackaged dialysis supplies and solutions directly to a self-administering dialysis patient,

who is under the care of a physician, at the patient's residence notwithstanding the foregoing, the phrase does not include:

(1) Intracompany sales or joining together of five or fewer pharmacies to place a direct order of medicine from the pharmaceutical manufacturer.

(2) The purchase or other acquisition by a hospital or other health care entity that is a member of a group purchasing organization of a drug for its own use from the group purchasing organization or from other hospitals or health care entities that are members of such organizations.

(3) The sale, purchase or trade of a drug or an offer to sell, purchase or trade a drug by a charitable organization described in section 501(c)(3) or the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. ? 501 (c)(3)) to a nonprofit affiliate of the organization to the extent otherwise permitted by law.

(4) The sale, purchase or trade of a drug or an offer to sell, purchase or trade a drug among hospitals or other health care entities that are under common control.

(5) The sale, purchase or trade of a drug or an offer to sell, purchase or trade a drug for emergency medical reasons, including transfers of prescription drugs by a retail pharmacy to another retail pharmacy to alleviate a temporary shortage.

(6) The sale, purchase or trade of a drug, an offer to sell, purchase or trade a drug or the dispensing of a drug pursuant to a prescription.

(7) The distribution of drug samples by manufacturers' representatives or distributors' representatives.

(8) The sale, purchase or trade of blood and blood components intended for transfusion.

(9) The sale of minimal quantities of prescription drugs by a retail pharmacy to licensed practitioners for use within their practice when the sales do not exceed 5% of that retail pharmacy's total annual prescription drug sales. "Wholesale distributor of prescription drugs." A person who operates a facility from which a person engages in the wholesale distribution of prescription drugs, including, but not limited to, manufacturers, repackers, own-label distributors, private-label distributors to jobbers, warehouses, including manufacturers' and distributors' warehouses, chain drug warehouses and wholesale drug warehouses, independent wholesale drug traders and retail pharmacies that conduct wholesale distributions.

363 P.S. ? 391.3 435 P.S. ? 780-101 et seq.

Section 4. License and renewal requirements5 (a) License. -After September 14, 1992, a person may not operate a

facility within this Commonwealth from which a person engages in the wholesale distribution of prescription drugs without having secured from the department a

license and a current renewal of that license. A person shall obtain a separate license to operate each facility.

(b) License renewal. -A license shall renew its license at the same time it is required to renew the registration issued to it under the act of April 14, 1972 (P.L. 233, No. 64), known as The Controlled Substance, Drug, Device and Cosmetic Act,6 or as otherwise required by the department, but in no case shall the period for renewing the license be longer than two year. A form for the license renewal shall be mailed to each licensee on or before the first day of the month in which the current renewal expires. If a completed license renewal is nether postmarked nor received by the department before the first day of the following month, the license shall become invalid. Failure of the licensee to receive the form by mail shall not serve as an excuse for failing to timely renew the license.

(c) Fees. -Each person who applies for a license shall submit a fee of $10 with the license application. The license renewal fee shall be $100, unless changed by regulation, and shall be submitted with the complete license renewal form. The late submission of a completed license renewal form shall be accompanied by a late payment fee of $25 for each month or portion thereof that expired after the license renewal was due. The late payment fee shall be in addition to any administrative, civil or criminal penalty that may be imposed against a licensee for continuing to engage in the wholesale distribution of prescription drugs without a licensee for continuing to engage in the wholesale distribution of prescription drugs without a current license. Fees under this section may be amended by regulation of the department.

563 P.S. ? 391.4 635 P.S. ? 780-101 et seq.

Section 5. License application7 (a) Information on application. -An applicant for a license shall provide

the following information on a license application form approved by the department:

(1) The name, full business address and telephone number of the facility for which the applicant is seeking a license to operate.

(2) The name, full business address and telephone number of the applicant.

(3) All trade or business names used by the applicant. (4) Addresses, telephone numbers and the names of contact persons for all facilities used by the facility for which the license is being sought for the storage, handling and distribution of prescription drugs. (5) The type of ownership or operation, that is, partnership, corporation or sole proprietorship, of the facility. (6) The name of the owner and operator of the facility as follows:

(i) If a sole proprietorship, the full name of the sole proprietor and the name of the business entity.

(ii) If a partnership, the name of each partner and the name of the partnership.

(iii) If a corporation, the name and title of each corporate officer and director, the corporate name and the name of the state of incorporation.

(iv) If a person other than a sole prorietorship, partnership or corporation, the name of the person and of the individual in charge of that person. (7) Any other information required by the department, including information bearing upon whether there are grounds for refusing to grant the license under section 9.8 (b) Changes in information. -A change in any information provided in the application shall be submitted to the department within 30 days after the change or as otherwise required by the department.

763 P.S. ? 391.5 863 P.S. ? 391.9

Section 6. Storage, handling and recordkeeping9

963 P.S. ? 391.6

(a) Minimum requirements. -Licensees and their officers, agents, representatives and employees shall satisfy the minimum requirements of this section for the storage and handling of prescription drugs and for the establishment and maintenance of prescription drug distribution records.

(b) Facility. -The facility shall: (1) Be of suitable size and construction to facilitate cleaning,

maintenance and proper operations. (2) Have storage areas designed to provide adequate lighting,

ventilation, temperature, sanitation, humidity, space, equipment and security conditions.

(3) Have a quarantine area for storage of prescription drugs that are outdated, damaged, deteriorated, misbranded or adulterated or that are in immediate or sealed secondary containers that have been opened.

(4) Be maintained in a clean and orderly condition. (5) Be free from infestation by insects, rodents, birds or vermin of any kind. (c) Security. -The facility shall be secure from unauthorized entry as follows: (1) Access from outside the premises shall be kept to a minimum and be well controlled. (2) The outside perimeter of the premises shall be well lighted. (3) Entry into areas where prescription drugs are held shall be limited to authorized personnel.

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